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Wednesday, November 12, 2008

News for 11/12/08: Activision Blizzard Plays the Sequel Game

This week, we're discussing some recent comments made by Activision Blizzard CEO Robert Kotick. Most interesting to us were his very candid comments about the company's approach to sequels and intellectual property. Take a look at some of the articlesdiscussing the story and then feel free to weigh in via the comments, email, Twitter, smoke signals, etc. How do you feel about the current video game industry's business model and its treatment of sequels versus new franchises?

Scott: From the Gamasutra article: "With respect to the franchises that don’t have the potential to be exploited every year across every platform, with clear sequel potential that can meet our objectives of, over time, becoming $100 million-plus franchises, that’s a strategy that has worked very well for us," Kotick said in the Gamasutra-attended call later transcribed by Seeking Alpha.

Jorge: That strategy has worked very well for them indeed.

Scott: This resulted in them dropping Ghostbusters! Good thing Atari picked it up. Even if the game doesn't end up being all that great, I love Ghostbusters. Chronicles of Riddick, not so much. I think the crazy thing here is how brazen they are about their financial strategy:He literally used the word "exploit!"

Jorge: He knows exactly what he is doing, though maybe not what he is saying. "Exploit" has some pretty negative connotations. He could be dropping some really cool IPs too, 50 Cent notwithstanding. It makes me uncomfortable as a gamer knowing they are willing to drop innovative titles because of a market strategy.

Scott: Let's remember that Activision Blizzard has arguably the hottest IPs out there: WoW, Guitar Hero, Call of Duty. Exploiting these franchises is their meal ticket.

Jorge: They are also working on Starcraft II, which they are planning to break up into three games for each class. These are some great titles, but this is a bit weird. It feels like they are artificially elongating Starcraft, and these franchises in general, so they can milk it as much as possible. I wonder what the development process look like for these games on a ten year goal.

Scott: It looks like WoW or Guitar Hero: churning out games so people never are without the thing they like, regardless of innovation.Of course, GH came out in 2005, and it already seems like it's been 10 years.

Jorge: In that sense they are pretty presumptuous that they can keep these titles going.I imagine that if Activision Blizzard is keeping the same development teams on the project, the product will become stale. Surely this must stifle the creativity of the development crew if they are churning endless iterations. The result will be painfully repetitive sequels.

Scott: They'll have to do what the CoD franchise does: cycle development teams on and off the same franchise.

Jorge: But how are they going to keep people interested in this in ten years!? That is a ridiculously long time. Are you really going to want to play CoD 15? It's not going to happen unless Activision Blizzard personally funds a Third World War.

Scott: Which they could, based on their current profits.

Jorge: Also, if the industry is too focused on sequels, my fear is independent developers and new IPs will be hard to publish because developers consider them too "risky".

Scott: I think that has already happened to a large extent and that he's just articulating the current situation. We don't like hearing it, but it's basically true.In a way though, Nintendo has been employing this technique since the company's inception: Look at all the Mario games.

Jorge: Yes, but some of those are pretty big leaps from the original franchise. Mario Kart has very little to do with Mario Sunshine. They are the same franchise, but Nintendo was willing to take dangerous creative leaps.

Scott: True, Nintendo has a track record of innovation.

Jorge: I think Activision Blizzard is too optimistic about this. I think people are going to be sick of these titles long before the ten year mark.

Scott: But either by luck or by skill, they seem to be in a unique situation to do try this business model. People love these games and they don't seem to be slowing.

Jorge: If they come out with these so often, a guitar hero title every year with another CoD in development before the first one of the year even drops

Scott: But there must be people out there who will just by the game based on the title, almost out of habit. This is what Kotick is cashing in on: people who like the games enough to buy them, even if they won't play them that much, rather than targeting a smaller number of people who will buy them, love them, and play the hell out of them.

Jorge: Of course, from a business aspect it makes a lot of sense. Shareholders must be loving this. But from a gamer perspective, I am worried about the repercussions of this business model.

Scott: I have been thinking a lot about World of Goo and its place in this business model.Maybe if companies are focusing on one franchise, it allows games like this to exist? Or perhaps WoW is secretly funding some black-ops Activision Blizzard new IP project that we don't know about?

Jorge: God I hope so.

Scott: Maybe if the big companies were using a shotgun style scattering of new IPs, it would dilute the impact of unique games like World of Goo.

Jorge: That could be how the process works. It's a circle of life and death. A small developer works on a new IP, the good ones float to the top to be milked to death.We'll have to see in ten years whether Bobby Kotick is fired or if we're just loving Cello Hero: Symphony Edition!

Scott: Either way, I'm sure he's a rich, rich man. Little Bobby Jr. is flying to college on the wings of Guitar Hero.

Jorge: I hope Blizzard is using some of their money on genetic engineering. That way he could fly on a real mountable griffin.

4 comments:

I think you guys bring up some good points on the pitfalls of the game industry, in which we frequently see a recycling of tried and true gameverses in the interest of making money. (I'm looking at you Final Fantasy...20 games?)However, having said that, I don't think there's reason to worry yet, if ever. For every big-name publishing house like Activision Blizzard or EA, there's a bunch of little guys making unique, original, and quality game titles. Pandemic, Valve, and all kinds of other studios are striving to push the edge of our creative universe with great new games. Besides, big houses can still put out amazing and fresh stuff. Look at 2K games and BioShock, or to some extent UbiSoft. More or bigger companies with bigger profit margins ensures that no matter the product, the quality is top notch.

Though I'm totally dismayed to hear that SCII is going to be three games. Gyp city.

@CitizenWill - While I understand where you are coming from, studios like Pandemic (to use one of your examples) are being bought by the bigger publishers anyway so in some respects your point is irrelevant. I mean look at how close 2k Games came to being purchased by EA, which if it happened, would have seen Rockstar and Irration... Oh wait sorry, 2k Boston/Australia (and now Marin) all purchased as well.

That said, publishers buying these studios isn't as bad as it may initially sound. EA for example have seemingly completely turned their business intent and attitude around. Sure they still do their yearly Madden and Need for Speed franchises but at the same time they are now releasing games like Dead Space, Mirror's Edge and Burnout Paradise. Buying the good development teams but leaving them up to the creativity has worked for EA and now EA's lineup doesn't look as money-hungry as (arguably) Activision's does.

But then again, Activision has some decent studios as well like Infinity Ward...

Needless to say, while sequels are a bit much at times we still have a reasonably healthy and innovative industry regardless of whether the developers (and/or publishers) are the big guns or not. If we can have games like Portal and BioShock releasing alongside the next Gears of War game, then by all means I'm proud to be a gamer in the current day.

Absolutely. These smaller studios being purchased as you said, is not a bad thing. It allows them more access and resources that would not previously been available. I think that despite many of these studios being swallowed, there will always be new and divergent studios coming forth to produce what they feel is new, original, and pertinent to the game world.And to be fair, the word exploit, while frequently used with a negative connotation, simply means to utilize to practical account or to employ to the greatest possible advantage. In either case, I fail to see the negative in studios doing that.

Nice discussion guys. I guess the real trick is making sure little studios that get bought up still retain creative independence. Nothing wrong with a fat bank account if their visions aren't comporomised.